Facebook’s future and the implications for retail

February 3, 2012

Social media has transformed the way brands connect with consumers, which is why anyone interested in the future of retail owes it to themselves to spend at least a few minutes combing through the registration statement Facebook filed with the Securities and Exchange Commission this week in connection with a planned public stock offering.

The numbers contained in the filing are ridiculous to those accustomed to the pace of growth and rate of profitability in the retail and consumer package goods industries. For example, the filing’s five-year consolidated financial data section offers a view of the exponential growth the company has experienced and last year allowed Facebook to produce a $1 billion profit on revenues of only $3.7 billion.

Facebook’s mission, “to make the world more open and connected,” is, as it turns out, also quite profitable and growing. The number of people who use the platform daily is now about 483 compared with 327 million a year ago, and there is a sense that Facebook has only begun to understand how to monetize the potential of its users. That’s why retailers and suppliers owe it to themselves to understand all they can about how Facebook plans to achieve future growth.

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